Who Profits From Profits?

"Prices are up, profits are up, and the oil companies want more. But it is not fair to the American people that they should have more."

At first that sounded just great. Surefire, right-on stuff. The stuff out of which leadership is made. Jimmy Carter standing up to the big, bad oil giants and their obscene profits.

But think a minute. Are the oil companies truly unfair to the American people? If not, why say so? And what is the impact of the charge on that overriding domestic and foreign priority -- the reindustrialization of America?

Exxon, the biggest of the oil companies, provides the best test. Its profits for the third quarter of this year amounted to a record $1.1 billion. That, measured against the third quarter of 1978, represented an increase of about 120 percent.

But third-quarter earnings in 1978 were abnormally low--lower than at any time since the second quarter in 1973. Moreover, special considerations -- a change in the British tax laws and currency fluctuations -- accounted for over a quarter of the gains.

Only about a third of all the operating profits came from the United States, which has relatively tight price control compared with the rest of the world. Earnings on investment stood with much of American industry -- at about 18 percent.

Those numbers, to be sure, do not justify going into mourning for poor little Exxon. But the implication that Exxon works to the disadvantage of this country looks weak indeed. On the contrary, the evidence is that Exxon, like most international companies, gives most of the breaks to its home base. The United States, in other words, tends to benefit from the major oil companies.

Political reasons for knocking the companies abound all the same. There has been a big recent rise in the price of home heating oil and gasoline. More increases are bound to come. The country is mad and apt to get madder. At least a portion of the blame rests on the actions of the Carter administration. So the president needs a scapegoat on which to foist responsibility. In this populist country, at a moment when all authority is suspect, the companies are the best one around.

The more so as Carter now has to prove his leadership capacities. One measure is the fate of a proposed winfall profits tax on the oil companies, which is now before the Senate.

A stiff tax has already been approved in the Finance Committee. It will surely be made stiffer by the full Senate, and in the conference with the House By hitting out at the oil companies now, the president puts himself in position to claim credit for something bound to happen anyhow. He bets on a sure thing.

Only the innocent or the disingenuous can take offense at such tactics. Seeming to soak the rich is the essence of good politics in this populist country. But we ought to be clear, about the cost of populist politics.

The starting point for counting the cost is the plight of what I have called Big America. The major industrial producers -- the makers of steel, chemicals, autos, rubber, ships and many other such items -- are in trouble.

They are subject to severe regulation by what I have called Little America -- those primarily interested in fair employment, the environment and the consumer. They are also being severely challenged by competing firms in Japan, West Germany and other countries.

But this country cannot casually abandon industry for a service economy. Defense, for one thing, is at stake. For another, there is the matter of jobs -- especially jobs for minorities in hardpressed urban centers. So the health of the country is, in the long run, bound up with the revitalization of industry.

The reindustrialization of America, unfortunately, is not going to be established by corner banks, family farms or even medium-sized industry. It will take General Motors to stand up to Volkswagen, an Ibm to match Toshiba, and Alcoa to deal with Pechiney.

This country has already done itself grave damage by bad-mounting its steel industry, its nuclear power companies and its airplane manufacturers. It cannot afford to act as though all business is bad, big business worse and international big business still worse. Neither can it afford a president whose political stock depends on cultivating these pernicious illusions.